Wages like other prices are set in the market by the forces of supply and demand. A market wage is equivalent to the value added by an employee to a firm's income. Successful firms are those that can properly estimate this value. Those that overpay lose money. Those that underpay lose employees.

Unfortunately socialist dogma has focused on the employer as setter of wage rates. This has influenced current labor law in many pointless and counter productive ways. Worst among them may be the minimum wage law. The theory that wages can be raised by legislation is no more valid than the theory hurricane can be prevented by that method.

A worker earns what the value of his product is in the market. That value is set by consumers and not employers. A worker who is paid $5.50 per hour can not be made worth $6.50 per hour unless the value of his product increases. Passing a law requiring no one be paid less than $6.50 per hour means his employer would lose a dollar for every hour the man works. The worker will have to be let go. He can no longer work. To hire him is an act of charity, not of business sense.

The idea that employers can simply raise their prices to cover the cost of increases in the minimum wage is false. It begs the question as to where the customers will get the extra money they must now pay. Unless the government increases the supply of money there will be no money to pay higher prices. The amount of good and services for sale in the market is not increased by the minium wage laws. Hence there is no increase in purchasing power to allow prices to rise. If the government follows an inflationist policy prices can certainly rise, but this will simply consume the dollar increase given through raising the minimum wage.

The idea that employers will absorb the increased costs through a decrease in profits is equally false. It assumes all business are equally profitable and will be equally effected by minimum wage legislation. The marginal firms in industries that rely heavily on unskilled labor will be hit the hardest. Employment will shrink in those areas as the weaker companies fail.

The destruction of low paying entry level jobs and the consequent increase in the level of unemployment experienced by unskilled labor are inevitable results of minimum wage laws. These negatives can be masked by inflation or by strong economic factors elsewhere in the economy, but they cannot be avoided.

The unemployment caused by minimum wage laws also hurts by reducing the total amount of goods and services in the economy. The contribution by those now unemployed is lost. The community is that much poorer for the loss of their labor. Everyone is harmed as this is a reduction in real purchasing power not merely a reduction in the value of money caused by inflation.

Have you heard about Boat Days down at the harbor? Yeah. The Royal Hawaiian Band plays for visitors coming in on cruise ships-a warm, nostalgic reminder of the good old boat days.

The city doesn't offer this service for free, just yet. No siree. Cruise companies pay the city about $300 per gig in order to defray costs of the band. And cruise companies currently pass these costs along to the tourists in higher ticket prices.

But if some members of the city council have their way, the companies won't have to pay anything. They want to have the fees waived-meaning that the taxpayers will pay for it all.

What a nice way to show the true aloha spirit-city council members spending other people's money on the well-heeled tourists of ocean cruises.

Surely the locals won't mind spending more in property taxes-raising the prices of food, clothing, shelter-just to give tourists a flavor of the good old plantation days.

Indeed, if it's good for locals to pay for the band, then why not pay for leis? That's even more nostalgic. Every tourist coming off a boat could have a complementary flower lei. And we mustn't discriminate against tourists coming off the airplanes just because they aren't quite the upper crust. A band and a lei for them as well.

And if the restaurants will contribute generously to political fundraisers, then maybe the city could provide a nicely catered buffet for the tourists as well. We must have vision for the future! Perhaps someday the entire vacation of tourists could be paid for by the local populace. Surely, we'll be the most popular tourist destination in the world. Broke, but popular!

We are all aware that there is obviously no quick fix to the economic situation. However instead of complaining about our poor economy, let's stop to think about how we can make every dollar that we spend count for Hawaii and our economy.

Think about how to use your dollar each day and remember that you can make a difference in the economy by keeping your dollars within the State. People forget that when they go to shop at Kmart they may be getting some good bargains but they forget that they are not supporting our local economy. It is difficult for our State to audit big retailers and often times all of the profits that those retailers make goes back to their homebased state and therefore, bleed Hawaii of more profits.

We need to actively support our local businesses that give back and contribute to our economy by paying their State taxes and also by keeping their profits within the State. Invest your dollars in local businesses that have a vested interest in our community and are supporters and sponsors to all of our local charities, organizations and school programs like DARE to CARE. Invest your dollars in local businesses that make or produce products that perpetuate our island history, culture and heritage.

As a small business person that runs my own company, Design Dimensions, which is an interior design firm, I practice this theory everyday. For example, if I have a client who wants a custom-made bedspread and pillow covers done, I have it made locally from a local upholsterer rather than having it made out of state. If I find something that I need from a catalog, I take it to my local furniture vendor and see if he can get something similar to what I am looking for and I then order it through him. As much as possible I try to keep my money in Hawaii by using all of my local suppliers and vendors because they all contribute to our state by paying taxes and keeping their profits within our State.

Ideas to think about:

* Instead of going to the mainland for a vacation, head out to an outer island; go to a bed and breakfast, and go exploring and learn more about either your island or another island.

* Drink Lion Coffee over Starbucks.

* Don't buy anything from a mail order catalog, buy it from a local boutique or small gift shop.

* Shop at your local markets, Times, Star, Foodland because they support our local communities, businesses, and schools.

* Buy local produce and local products, look for the made in Hawaii labels.

* Eat at Like Like Drive Inn or a local diner instead of a mainland chain restaurant.

Everyone can do their part in helping our economy by watching how they spend that dollar.

Passed in 1972, the Hawaii Pre-Paid Health Care Act is based on a $100 deductible standard. By that I mean that any competing health care plan which is based on individual pricing, must offer $100 deductible or less ($50 or "0"). That $100 deductible standard was in effect in 1972 and is still operative even though inflation, if the standard had been indexed, would have pushed it to $250 by now.

And, if it was $250, lots and lots of local companies would be using Aetna or some other commercial carrier and saving 30% or more in premiums, not to mention more individual choice. Further, HMSA, Kaiser and other local plans would have to revise their programs to compete.

This calls to mind a profound remark made by Ralph Waldo Emerson: "Cause and effect, means and ends, seed and fruit, cannot be severed; for the effect already blooms in the cause, the end pre-exists in the means, the fruit in the seed."

The Hawaii Pre-paid Health Care Act was passed in a cause based on personal greed and the avoidance of individual responsibility. Each employee would no longer be responsible and accountable for his health care or that of his family. Such an employee could enjoy destructive personal habits that impact on health with enormously reduced financial impact. And, when sick, he could demand his "right" to the "best" health care regardless of cost. The cost of course exists, but each individual case is spread over many in the community. Thus, I can misbehave, demand to be taken care of medically at great expense, and pay very little in direct financial consequences.

But somebody pays. There ain't no such thing as a free lunch (TANSTAAFL). And that somebody is you and me and the rest of Hawaii. I estimate that our health care costs are double what they would be if a free, competitive market prevailed. Heaven knows how many companies have never started, how many more jobs would be in existence without this drag in our economy.

As Emerson said, the effect already blooms in the cause. Greed and the urge to have government solve the individual, personal problems of our citizens without accountability was the cause. We are living with the effect and it will continue to worsen.

Another example is our government school system. The seed was looking for something for nothing (the government will assume responsibility that should be that of the parent - the proper education of his or her children). We are now wallowing in the rotten fruit. Those who do not understand Emerson's warning now continue to call for more government money to be spent.

At the opening of our 1999 legislative session, it would be well for the leadership to recite the Emerson quote. We, in turn, should shout in unison: TANSTAAFL! For it is we who ultimately pay; never, ever the lawmakers. Who even knows who designed and passed the 1972 Act? But we are paying and paying and paying - they are not. And they will not. They pass, we pay. TANSTAAFL to you, too.

As the 21st century work world approaches, many of us are still adjusting to the technological advances of the 90's, and to the fact that virtual offices, quick access to a global marketplace, and ever-changing software and hardware have revolutionized the workplace. Some believe that the office of the future is already here. However, psychologists warn that these fast-paced advances will be detrimental unless organizations concentrate "on better understanding and nurturing the human side of business" writes Patrick McGuire in Wanted: Workers with Flexibility for 21st Century Jobs, in the American Psychological Associations' Monitor, July 1998 (Online, p.1).

This is particularly true for supervisors and managers who must be sensitive to the challenges and frustrations that employees face as we approach the high tech millennium. Let's explore four supervisory skills that are critical to bringing out the best in our employees.

1. Confidence. Self-confidence forms the foundation of top-notch supervisory skills. Supervisors who feel confident about their skills will not be frustrated or intimidated by employees, and maintain their objectivity as they plan, motivate, and direct productivity.

2. Clear Communication. Supervisors must not assume that employees automatically understand their directions and instructions. They must communicate clearly and precisely, providing adequate time for discussion. Supervisors must be willing to listen to employee problems, otherwise disorganization and stress invariably occur. For example, an employee realizes that he does not have enough time to complete a task. However, he resists discussing this with his supervisor because she usually gets irate when he asks for help, interrupts him, and does not listen. This breeds resentment, whereas good supervisors gain respect from employees by motivating them to troubleshoot in an atmosphere of trust and teamwork.

3. Praise. A common mistake made by supervisors is a failure to give praise. Instead, emphasis is on production and profit. However, to maximize employee effectiveness and incentive, supervisors must offer praise. Employees enjoy feeling that they are part of the team, and that they are contributing to an important overall project. This motivates them to take pride in their work, and results in a positive environment where employees believe in the business, and do not just view it as a place to work.

4. Stress Management. A supervisor has one of the most challenging roles in a business, and in order to maintain strong skills and "keep their cool" in high stress situations, supervisors must have access to an Anger Room - a safe, confidential place where they can briefly retreat and discharge pent-up emotions, such as anger. They are then able to resume their responsibilities with a renewed perspective. Supervisors must also recognize that in order for employees to maintain high levels of creativity and productivity, they too invariably need a safe place to vent. This discharge of emotion should be encouraged, because it reduces absenteeism, minimizes workload depression, and keeps employees functioning optimally. For more information call Dr. Gelb's office at 943-2994.

Minimum Wage | Boat Days | Keeping Money in Hawaii
Cause/Effect & "Tanstaafl" | Maximize Supervisory Skills

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